- Operators must bring viable shut-in wells back into production
- Well intervention work provides attractive opportunities at an average £12/boe cost
- Report shows urgent need to boost level of well activity and anchor the supply chain in the UK
A huge opportunity to access resources in a more timely, clean, and cost-effective way and support the UK’s supply chain is the highlight from the 2024 Wells Insight Report published today (5 September).
The report from the North Sea Transition Authority (NSTA) reveals that well intervention is currently able to provide hydrocarbon production at a cost of less than £12/boe, a very attractive option at today’s oil and gas prices. In addition, well intervention requires fewer operational days, less construction material, minimal waste disposal, and lower fuel burn than drilling a new well, and therefore produces lower emissions.
Operators should strive to increase their well intervention activity to extend the production lifespan of their wells, and to provide a stable flow of work for the UK’s world-class supply chain, whose expertise is in demand globally. Suppliers, including rig owners, are increasingly seeking opportunities overseas due to a lack of contracting opportunities in the UKCS. It is vital that this capability is kept in the UK to deliver the floating wind, carbon storage and hydrogen projects which will accelerate the energy transition.
Interventions increased in the Northern North Sea (NNS) to 102 wells in 2023 from 82 in 2022. There was also an increase West of Shetland (WoS) where nine wells benefited from intervention work in 2023 up from two in 2022. However, Central North Sea (CNS), Southern North Sea (SNS) and the East Irish Sea (EIS) experienced a decrease in activity.
To encourage more interventions, the NSTA has already held one-to-one sessions with leading North Sea operators and completed a detailed study of the 795 shut-in wells to understand what percentage could be brought back into production. Data from the study and feedback from well operators is being analysed and will lead to a supply chain and operator workshop at the end of the year which will identify cost-effective solutions to bring wells back into production.
Carlo Procaccini, NSTA Chief Technical Officer, said:
'Well intervention work can and does produce impressive results, boosting efficiency and providing cleaner and cost-effective production. We expect that bringing together operators with the supply chain will highlight significant opportunities for everyone.'
Separately, the report reveals that total active well stock on the UKCS is now 2,546, down from 2,560 in 2022. The past year has also seen an increase in the number of shut-in wells to an all-time high of 31% of the active well stock, or 795 up from 742 in 2022.
A proportion of the shut-in well stock could be brought back online. However, without investment in infrastructure or downhole interventions, it is likely that many of these wells will be permanently decommissioned.
Where reactivation is not feasible, wells should be decommissioned in a timely and cost-effective manner. Disappointingly, industry only achieved 70% of planned well decommissioning activities last year as operators continued to defer work. The NSTA recently opened investigations into missed deadlines as part of its approach to boosting compliance and tackling the backlog of wells awaiting plugging and abandonment. As with well interventions, well decommissioning should provide a sustainable and lucrative source of income for the supply chain.
The report also shows that operators drilled eleven exploration wells, two of which were repurposed as producers, and five appraisal wells in 2023. Total exploration and appraisal well spend was £571m (£287m in the CNS; £84m in the NNS; £95m in the SNS and EIS combined; and £104m in the WoS). This compares with £275m in 2022.
Industry spent £1.42bn on completing 41 new development wells in 2023, slightly more than in 2022 and in 2021.
The Central North Sea saw the highest spend of £678m, with £235m in the Southern North Sea and East Irish Sea, £299m in the Northern North Sea and £208m West of Shetland.
Source: NSTA
